independent

Saturday 30 August 2014

A minefield for Revenue

LOCAL AUCTIONEERS ARE THE PROPERTY VALUATION EXPERTS AND THEY SAY THE REVENUE COMMISSIONERS HAVE A VERY BIG MOUNTAIN TO CLIMB. DAVID MEDCALF AND ELAINE FURLONG REPORT

Published 15/01/2013 | 10:16

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Colum Murphy of Kehoe & Associates: 'they won't get all the valuations right'.

WEXFORD-based estate agent Colum Murphy does not envy the Revenue Commissioners their job. Putting a value on each and every home in the country for the purposes of assessing the new property tax is a task that involves the juggling of a bewildering number of variables. Daunting is the only word.

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A peek into the shop window at his Kehoe & Associates base demonstrates that houses do not come in handy, pre-packaged form with an obvious worth in terms of a set number of euro per standard unit of area. The firm has scores of offerings on their books at the moment, ranging from a two-bedroomed terraced retreat in Castlebridge on the market at €48,000 to a 'charming period residence' at upmarket Summerhill in Wexford which is yours for a mere €900,000.

But there are plenty more two-bedroomed houses at wildly differing prices at locations that include William Street in Wexford (asking price €54,000), and a superb two-bedroomed ground floor apartment in Rosslare (€90,000). Or how about parting with €93,000 for a duplex at Spawell Road, described in flowery auctioneer's language as 'one of Wexford town's most sought after residential addresses'.

That is more than twice the amount sought for the humbler dwelling in Castlebridge. Using the number of bedrooms as a rule of thumb will clearly have its limitations.

Meanwhile, the splendid house at the other end of the scale sitting on its acre of garden in Summerhill is a real one off, divided into several parts. It will present a real poser for the Commissioners assessors with its warren of rooms and various apartments.

Back in the 17th century, the British government began trying to collect money by taxing windows. The result of this much-hated imposition was that many householders elected to live in near darkness rather than stump up. The history of revenue raising is that each new scheme produces anomalies, evasions and unrest. The latest wheeze of the current cash strapped Coalition unlikely to be any different.

Colum Murphy and fellow members of his profession are happy to put asking prices on houses for sale, confident that they will be not too far from the mark. Yet that is very different from putting a legally binding valuation on a property - a process which in fairness should presumably be done with a degree of precision.

'I think it is preposterous for them even to attempt this,' says Colum Murphy. 'I don't see how that is possible. Property comes in so many shapes and forms.'

On the face of it, there should be no problem valuing the apparently identical units in a housing estate but Colum points out that every neighbourhood alters as it matures. A resident who has invested in triple glazing, a small extension, up to date central heating and a valuable fitted kitchen owns a completely different property to the family next door who are content to leave their place as they bought it.

Away from the standardised accommodation of suburbia, the task of running the rule over every property with any degree of accuracy must be even more daunting. What is the correct tag to place on a Victorian farmhouse which will probably never be sold without the farm land? Or on the living quarters over a town centre shop? Or on a modest cottage with a corrugated iron roof ? And do the Revenue Commissioners have a grasp of the factors that really affect price?

Colum Murphy lets slip one trick of his trade, as an example of how one house can have extra charms in the eye of the potential buyer: 'A view of water is a huge selling point - river, sea or lake.'

He says frankly that he cannot imagine how the job of checking to see if each and every home in the land has a lovely landscape or a scrapyard next door can be carried out from behind a desk in Dublin. On the other hand, carrying out fieldwork to research hundreds of thousands of properties is clearly impractical. A valuation minefield beckons and some handy criteria may have to be deployed.

'Square footage would probably be the brilliant but Revenue don't have that information,' muses the man from Kehoe & Associates. ' They won't get all the valuations right.'

At least the officials will have the benefit of the information on the Property Price Register which has been logging prices over the past three years. However, data on transactions concluded more than three years ago is very time consuming to dig up.

Even a seasoned auctioneer will admit that there are some properties which defy mere logic, whether adjudicated by floor space, neighbourhood, the number of bedrooms, the number of bathrooms or even the number of windows. Colum recalls that he and his colleagues were completely stumped a few years ago when asked to dispose of a castle in Cahore near Gorey. The only solution was to put it out to public auction and see what the market decided.

Our tax authorities will have no such luxury to assist them.

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